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MR. DAVID GREGORY: Our issues this Sunday, the economy in free fall. More than half a million jobs lost last month, making the yearly decline the worst in six decades and the unemployment rate now at its highest point in nearly 16 years. The president-elect urges lawmakers to act fast.

(Videotape)

PRES.-ELECT BARACK OBAMA: For every day we wait or point fingers or drag our feet, more Americans will lose their jobs.

(End videotape)

MR. GREGORY: Can his plan prevent an economic depression? When might Americans feel some relief? And is there long-term danger as government spending and America's debt reach historic levels? This morning, insights and analysis from a special economic roundtable. With us: economic adviser to President-elect Obama, former Congressman David Bonior of Michigan; editorial page editor of The Wall Street Journal, Paul Gigot; chief Washington correspondent for CNBC and New York Times political writer John Harwood; Vanity Fair contributing editor Bethany McLean; and chief economist of Moody's economy.com and author of "Financial Shock: A 360 degree Look at the Subprime Mortgage Implosion and How to Avoid the Next Financial Crisis," Mark Zandi.

Then, America inaugurates its first black president in just nine days. We begin an in-depth look at leadership tests for the new president. This morning, confronting the challenges in the African-American community. As he inspires the country to break racial barriers, how can Obama help the black community solve some of its deepest problems, including inner city violence, unemployment, high incarceration and school dropout rates, as well as the need for parental responsibility? Our guests: Bill Cosby and Dr. Alvin Poussaint, two men who have written the best-selling book "Come On, People: On the Path from Victims to Victories." They've traveled the country delivering this message to black communities.

(Videotape)

MR. BILL COSBY: I want you to go back to parenting. You young men, when you get married and you have children, you've got to parent. You've got to be parents.

(End videotape)

MR. GREGORY: We'll also be joined in this important discussion by two strong political leaders on the front lines of this struggle: the mayor of Washington, D.C., Adrian Fenty, and the congresswoman representing South Central Los Angeles, Maxine Waters. But first, the economy and the president-elect's stimulus plan.

John Harwood, you sat down exclusively with the president-elect during a week when he did something unusual, and that was give a nationally televised address to say, "This is the help that I'm prescribing, and it's coming." What is in this stimulus plan?

MR. JOHN HARWOOD: Well, he's got a couple hundred billion dollars for states and cities to try to keep them from laying off people, providing services that people need more of now that we're losing half a million jobs a month. He's got a hundred billion dollars of infrastructure, try to spend on roads, bridges, electricity grid, green jobs, alternative energy spending. He's got $300 billion worth of tax cuts, most of which he campaigned on, some of which he's added to try to lure Republicans to support this package on the Hill.

MR. MARK ZANDI: Is it big enough? Is $750 billion, a trillion dollars enough? The economy is in great trouble. We lost 500,000 jobs in December, 2.6 million jobs in 2008. That's the most since 1945.

MR. GREGORY: Mm-hmm.

MR. ZANDI: Unemployment's 7.2 percent. So is 750 billion, a trillion going to be enough to jump-start the economy, to get the private sector back in the game?

MR. GREGORY: Congressman, is that--that's a pretty amazing statement that we're talking about something, at least $775 billion, and the big question about is is it big enough for this economy?

FMR. REP. DAVID BONIOR (D-MI): Well, it's a big economy. And to infuse the dollars that you need to move us out of this recession is going to require quite a bit. This may be the first tranche of a series of measures that are going to be needed to move us forward. But I think the--a big question that we have to face here is not just the size of this package, and the fiscal package and the monetary package, but what do we want to recover, too?

MR. GREGORY: Mm-hmm.

REP. BONIOR: What do we want to--do we want to go back to what we had, which was a pyramid that really was imbalanced because of the inequality of income at the top?

MR. GREGORY: And that--I think that's such an important point. I want to get to that.

REP. BONIOR: OK.

MR. GREGORY: You know, the future of the economy.

Let's talk about the timeline and some of what's projected here. The Obama team put out an economic report in which they said this. This is The Job Impact of the American Recovery and Reinvestment Plan, which is what they're calling it: "A package in the range that the president-elect has discussed is expected to create between three and four million jobs by the end of 2010." That's fourth quarter, Bethany, of 2010. And this is what the president-elect said during your interview, John, with him during the week about timeline. Let's, let's watch that.

(Videotape, Wednesday)

PRES.-ELECT OBAMA: But understand that the best estimates we're getting right now is even with the massive effort that we're going to make, we are still looking at the prospect of unemployment at a fairly high level. It just won't be the double-digit levels that we might see if we took no action whatsoever. And it may take most of next year before we start seeing the economy growing again in the ways that it should.

(End videotape)

MR. GREGORY: What's your big question about the stimulus plan?

MS. BETHANY McLEAN: Will it work, and how do we pay it back? We've gone from a few years ago the conventional wisdom was the economy's just--going to be just fine, housing isn't a problem. A couple of years ago it was the subprime problem is contained, this is only an issue of bad mortgages. Now the conventional wisdom is let's spend our way out of it. So as someone who's always a little bit terrified by the conventional wisdom, I'm terrified by that large question: How do we pay it back? What happens if it doesn't work?

MR. GREGORY: Paul, let's focus on the timeline here. It is striking if we're not really going to have sizable job creation or kind of a ending job loss until fourth quarter 2010, it's January 2009, there's a lot more misery to come here.

MR. GIGOT: Well, I, I, I--who knows? I mean, if, if, if you were an investor and, and you knew that, you, you'd make, you know, billions of dollars.

MR. GREGORY: Mm-hmm.

MR. GIGOT: But I think that--there--remember, we're forgetting something. The Federal Reserve has been pushing trillions, literally, $2 trillion onto its balance sheet as, as already a form of stimulus. And that has begun last fall, a little bit earlier, and that's going to flow through the economy, and it usually takes about a year or so before that makes a difference. So I think that's going to work even no matter what the Congress does.

MR. GREGORY: The issue of impact, Mark Zandi, speaks to some of the risk of how long it takes. This is how The New York Times reported it Saturday: "The risk is that Obama and the Congress will weigh down their effort with measures that cost many billions of dollars but may not have much impact on economic activity. Tax breaks, for example, usually produce less than $1" worth "of stimulus for every dollar they cost, economists say. Spending on public construction projects, like highways and bridges, produces the most economic activity--but there's a limit to how many projects are `shovel-ready,' and even those take time to generate jobs and ripple through the economy."

MR. ZANDI: Yeah, that's exactly right. The, the, the spending, the infrastructure spending, the aid to state government is the most efficacious form of stimulus, it has the biggest bang for the buck. But I do think you need some tax cuts, and, and there's two reasons for that. One, you need to broaden support for this package. You need a lot of people to sign on, because you want to get it done quickly, in February. And the other thing is it gets into the economy very quickly, stimulus right away, this spring, this early summer, and obviously the economy needs help as quickly as it can get.

MR. GREGORY: Is it--yeah, go ahead.

MR. HARWOOD: There's a couple points about what Mark was saying. First of all, Mark is an example of some of the assets that the Obama team has in this argument. Mark did not support Barack Obama during the campaign, and yet he's echoing some of the arguments the Obama team makes. On the question of whether it's enough, what Obama told me was this package was built to grow. They were proposing...

MR. GREGORY: Right.

MR. HARWOOD: ...on the low end, knowing that during the legislative process it was likely to get bigger. But of course that exacerbates the question that--if that happens, that Bethany raised, which is how we're going to pay it back.

MR. GREGORY: And what about--Paul, what about the idea of tax cuts as being as stimulative as infrastructure spending?

MR. GIGOT: Well, I think they're much more stimulative if they're the right tax cuts.

MR. GREGORY: Mm-hmm.

MR. GIGOT: I mean, we have a capital strike going on right now. Nobody wants to take any risks, nobody wants to make any investments. Part of it's the uncertainty about the damage that Congress might do, but part of it is also the fact that everybody's frozen. You need the incentives to invest, particularly in the private sector.

MR. GREGORY: Right.

MR. GIGOT: I think a, a tax cut, a big corporate rate tax cut, for example, or an across the board tax cut would be a lot more stimulative than this public spending, which has to come from somewhere.

MR. GREGORY: Right.

MR. GIGOT: You got to borrow it, you got to tax it, and that money, will it be put for more productive uses than that private dollar would have done?

MR. GREGORY: Congressman, the, the inclusion of tax cuts at this level is being seen in large measure as a political statement as well; this is how you bring Republicans onboard for this stimulus. Is--does he have the balance right, do you think?

REP. BONIOR: I don't know that the balance is right. We'll, we'll find out. My sense is that this is going to pass. There's no way that this--the package will not pass. The question is what the mix will be. Can he--could you pass it without Republican support? You probably could.

MR. GREGORY: Right. But that's not how he wants to do it, in this sense.

REP. BONIOR: But it's not how he wants to do it, and some people are suggesting that he's setting up the, the plate here for future programs so we can have more bipartisan support. But the, the, the piece that was raised by Mark here is, is absolutely right. I mean you don't get the bang out of the buck with the tax cuts like you do with direct spending. The acceleration on spending and moving the money through the economy helps more.

MR. GREGORY: But how does that get paid out? I mean, I want to help people understand, because I don't think I understand fully.

REP. BONIOR: Sure.

MR. GREGORY: You have a big infrastructure project, how long does it take for that to actually get paid out, even after you get passage?

REP. BONIOR: It take a while. But...

MR. GREGORY: And that's a factor.

REP. BONIOR: Well, but, but what happened--I, I was in the Congress back in the late '70s, and we had the same very argument, and there was a question of whether we should do an accelerated public works bill. And people would say, "Well, if we do that, it'll take a while to get into the economy," and we talked and we talked and we talked. We finally did it. But when we did it, it did hit and had a tremendous impact in terms of putting people to work and moving us out.

I would also point out that, with regard to Bethany's concern, and it is a good one, Bush, Reagan--both Bushes and Reagan and Gerald Ford, also, were--had to engage this question of spending and whether they wanted to deal with the deficits. And they eventually caved on it because it is the way out.

MR. GREGORY: And we're going to get to deficits in just a moment.

The politics, John Harwood. Here was the headline on Thursday in the Los Angeles Times: "Stimulus Hits Big Wall: Politics. Competing ideas mean a package may not pass until mid-February as economists caution against a diluted plan." How much trouble with Congress? Some of the critical Democrats--John Kerry, Carl Levin, Tom Harkin, Barney Frank, Kent Conrad, even the majority leader, Harry Reid, said, "I don't work for Obama."

MR. HARWOOD: You know, you were asking about has he got the balance right substantively in this package? I think he's got the balance right politically at this moment. The flak you were describing from Democrats is just about right for Barack Obama. You need a little bit of flak to convince Republicans you're dealing with the other side.

MR. HARWOOD: And on the, the Republican side, what's striking is how little flak there is. You know, I was talking earlier this week--or last week to Tom Coburn, conservative senator from Oklahoma; disagrees with parts of the package along some of the lines that Paul was suggesting, but says that Barack Obama is gaining confidence on Capitol Hill with the way he's reaching out to people, how straight up he is in dealing with Republicans. And you're getting people like Mitch McConnell and John Boehner saying, "Yes, we might be able to do some business with him."

MR. GREGORY: Let's talk about the hard sell for the public, because this is really amazing. We put together a chart that I think will really blow a lot of people away. Here it is. This is the federal bailout money and stimulus spending beginning in February of 2008, and it includes what could be passage of a new stimulus in February of 2009. So 12 months we're talking about. So the stimulus package from February '08, Bush administration, $168 billion. The money allocated to bailout Fannie Mae and Freddie Mac, 200 billion. Now, only 13.8 billion of that has been drawn down by Freddie Mac. Bailing out AIG, the big insurance company on Wall Street, $122.8 billion. The TARP, the financial bailout, 700 billion. Now that, you know, only half that's been used, they're trying to get the other half. The Obama plan, at least $775 billion, and it could go up from there. It's a total, Paul Gigot, of $1.9 trillion just for stimulus and bailout. That's staggering.

MR. GIGOT: It is staggering, and it's staggering that a lot of it occurred on the, on a Republican's watch. Let's be honest about it. But at some point those are claims on future taxpayers, OK? You can borrow it for a while, but ultimately somebody has to pay it back, and that means your children and--or your grandchildren. And so I think at some point you have to say, "Let's slow down. Let's stop." Somebody has to say, "Let's make sure that the things we're spending this on are actually more productive than the dollar that the private sector would spend it on."

MR. GREGORY: And, Bethany, are we getting bang for the buck on that huge line item of spending? Is it making a difference?

MS. McLEAN: I think it's really hard to know, and we won't know the answer to that for years. What's really interesting is how quickly the mood of the nation moved. If you think back to a year ago, it was moral hazard: How do we make homeowners who took out mortgages they couldn't afford suffer? How do we make Bear Stearns shareholders suffer? And all of the sudden here we are, the issue moral hazard is just completely off the table. No one talks about that anymore. And that's just a dramatic change in the mood when you speak about public support.

MR. ZANDI: But we, but we have no choice. We really don't. I mean, if we don't do something like this, a stimulus package, a foreclosure mitigation plan, the economy is going to slide away. Unemployment is going to rise into the double digits and we're going to lose tax revenues as a result and the deficit's going to be even larger than otherwise.

MR. GIGOT: But, Mark, don't you think that monetary policy is very powerful here? I mean, Christina Romer, who's the president's economic adviser now, she has written in 1994 that fiscal actions have relatively small effects. The big bang for the buck is monetary policy.

MR. ZANDI: In normal times I would agree with you, Paul, but this--the link between the Fed and the economy runs through the financial system. The financial system is literally broken. There--if--you can provide as much cash as you want; but you don't get credit, you don't get it done.

MR. GREGORY: Let's talk about what that means, monetary policy, which means the Fed's intervention. One of the things the Fed is doing, called quantitative easing, which is, you know, is a big term to say they're going to buy up all this long-term debt.

MR. ZANDI: Print money.

MR. GREGORY: Right, they're going to print money. But what does it mean?

MR. GIGOT: Well it means they're buying $500 billion of mortgages, for one thing. They're buying $200 billion worth of auto loans and, and, and consumer debt. So they're just shoving money into the economy. That has to have an impact at some point.

MR. ZANDI: But...

MR. GREGORY: Right.

MR. HARWOOD: And it raises the question...

MR. GIGOT: In fact, it may be an inflationary one in the long term.

MR. HARWOOD: And it raises the question--even if Mark is right, and I think the consensus among economists left and right is closer to what Mark is suggesting; that is, we have to do this. But it raises the question of what's the exit strategy and when do we shift from the short term to the long term and look at the long-term fiscal health of the country?

MR. GREGORY: Well, it's also a question of, Congressman, what is the timeline for really feeling some of this? I come back to this point, because I think a lot of Americans are wondering, "OK, well, we're having all of this talk, when do we actually feel something?"

REP. BONIOR: Well, there's--you know, talk in the economic community is that hopefully by the third quarter that we'll be able to see some differences, third and fourth quarter of this year, some differences in the change in the economy. That might be optimistic. It, it may be longer than that. But I would say that if we run this--we run the program that President Obama has suggested on the spending side through a prism of a green new energy economy, there ought not to be a worker in this country, a building trades person that's on the bench. They out to be out rebuilding our schools, our highways, our bridges, our buildings, our office buildings, our autos and our trucks.

MR. GREGORY: Hm.

REP. BONIOR: All of that needs to go through a prism of a green new energy economy, because I think that's the new economy that he is striving for, the president and the Congress, and that's the one that's going to really bring us out of this.

MR. GREGORY: I want to come back to deficit policy, and I just want to provide some context here. The deficit of fiscal year 2008 was at $455 billion, a number that will seem, you know, almost quaint now when we start to move forward and talk about these new numbers in the trillions.

Paul Gigot, in The Wall Street Journal the lead editorial on Friday was "Deficit Spending Blowout. Mr. Obama and Democrats have been talking about at least $800 billion, and probably $1 trillion, in new spending or various tax credits and reductions over two years. Toss that in and add more expected bailout cash, and if the economy stays slow the deficit could reach $1.8 trillion"--and it's supposed to be at 1.2 trillion this year--"or a gargantuan 12.5 percent of GDP. The 2006 Democratic vow to pass `pay as you go' budgets seems like a lifetime ago, when in political terms it was." What is the new president's deficit policy?

MR. GIGOT: It's spend whatever you can to get us out of this, and worry about the deficits later. That's his, that's his policy. And look, there, there is a certain sense--it makes a certain sense to have a deficit when you have a recession. I'm not totally--I'm not a deficit-phobe. I don't mind it. It depends what the deficit dollars are going to buy.

MR. GREGORY: Mm-hmm.

MR. GIGOT: I mean, if you're borrowing it for aircraft carriers like Reagan did to win the Cold War, you get a big payoff down the road. If you're doing it for tax cuts that really stimulate and drive private investment, and in two or three years' time bring the economy back, great. But if it goes to pork, if it goes to green jobs that may sound good in the short term but may not have a market response or a market for them, then it's a waste.

Offscreen Voice: Right.

MR. GREGORY: But...

MR. HARWOOD: David, one of the fascinating things is Obama said this week in my interview with him, we're not going to do this sequentially. We're going to be looking at the long term right as we go along with this stimulus. And in his news conference he talked about trying to take on Social Security and Medicare. When is he actually going to do that? I can't imagine he's going to try to push through very politically volatile fixes for Social Security and Medicare long term in this year, but he's talking about doing it in his term.

MR. GREGORY: One of the factors here--we were talking about this the other day, Bethany--is it's not like this money's in a bank account here, when we spend all this. We have to go get it from somebody. Somebody's got to give it to us. One of the people who give it to us the most are the Chinese, except the Chinese government now is pulling back and saying, "Well, first of all, we don't have the kind of cash reserves we normally do, and we're not going to go out and buy U.S. debt anymore." That's a big deal.

MS. McLEAN: It's a really big deal. It comes back to my question, how do we pay for it? And if we're reliant on other nations, particularly China, to finance our deficit, that's a question that I think is worth grappling with. Whether we decide to spend the money or not, and we will decide to spend it, but it's worth at least thinking about the possibilities. What happens if China starts pulling back from buying U.S. debt?

MR. ZANDI: Can I make a point about this? I mean, no one else is borrowing. There's no private sector borrowing. Businesses aren't borrowing, consumers aren't borrowing. There--so the government can come in and borrow at a very low interest rate. The 10-year Treasury bond, the key interest rate is 2.5 percent. So we do have a window. We can borrow very cheaply and finance this, and we should walk through that window quickly.

MR. GREGORY: All right, I want to get to a couple of quick items here. First of all, Congressman, on the Bush tax cuts, the president-elect has not said exactly what he'll do. Does he let it sunset? Does he let it just expire in 2010, or do they try to repeal it before that? What's the best idea?

REP. BONIOR: Well, from my perspective we've got to get a hold of this inequality we have in this country today on, on wages and income, and this Bush tax cut piece is a, is a big part of that. The top--over the last 20 years, the top 10 percent took 90 percent of the income gains in this--in the country. And the top 1 percent took roughly 60 percent. And the top 1/10th of 1 percent took 35 percent of that. I mean, it's skewed the wrong way. And what we need to do is focus in on not only monetary policy and fiscal policy, as we have talked this morning, but we've also got to talk about where we want to end up.

MR. GREGORY: Mm-hmm.

REP. BONIOR: And the way we end up with helping actually people is to give them the chance to bargain collectively at the table. With 7 percent unionization in this country, you're not going to get the dispersion that you need. We were successful in this country--after the second World War, the three most profitable decades for working people. Shared prosperity occurred after the second World War because unionization was at 35 percent. The Employee Free Choice Act is an important piece of legislation that President-elect Obama and Biden support, the Congress support, 60 percent of the American people support, and that will help share in the benefits and the bounties of the country.

MR. GREGORY: I want to quickly touch housing, Bethany. A lot of people believe that the economy will not begin to recover until housing prices truly bottom out. Should the government be in the business of either trying to bail out homeowners or reversing the slide in housing prices? Is that really a way to cleanse the economy?

MS. McLEAN: Well, I think the scary question here is what's the right level for housing prices, and can we--should the government be involved in determining that? One of the big issues with housing is that the, the price of a house has so radically outstripped the growth in income in recent years, and if you don't get that back into whack and you try to hold housing levels--housing prices at a level that is artificially high, I don't think you fix anything over the long term. You may address a short-term issue, which is that the continued decline in housing prices is going to be traumatic, but I think you've pushed the issue off for another day.

MR. GREGORY: Let me ask a final question here in a conversation that will certainly go on. Mark Zandi, on the other end of all this, what's the future of capitalism?

MR. ZANDI: Oh, capitalism's going to be fine. I mean, we've got a crisis of capitalism. We made a lot of mistakes as capitalists. And that's why we have a government, and that's why government has to be bold and step in the breach, and that's what they're doing. And on the other side of this, government will figure out a way to step out gracefully.

MR. GIGOT: Well, I think capitalism will survive, but I think a good question now at this particular juncture is what kind of capitalism? Are we moving to a European brand; a, a much larger welfare state, a much larger entitlement state with slower growth, higher long-term unemployment? Or are we going to stick with what has been for the last 30 years, more or less, a relatively successful model? We've had this blowup. If we don't make mistakes, we can get through this.

MR. GREGORY: All right, we're going to leave it there. Thank you all for being here. It's a big conversation and it's going to continue to be big for a long time, and we'll keep having it. So, thank you all.

And coming next, our presidential leadership series. This morning, the Obama presidency and how it will confront the challenges in the black community. With us: Bill Cosby, Dr. Alvin Poussaint, D.C. mayor Fenty and Congresswoman Maxine Waters. It's an important discussion that's coming up next here on MEET THE PRESS.

(Announcements)

MR. GREGORY: The Obama presidency and its impact on black America, after this brief station break.

Thank you all for being here to, to launch an important series on, on leadership tests that this president faces.

Bill Cosby, you and Dr. Poussaint wrote this book, "Come On, People," in order to effectively say there is a crisis in the black community. It is educational, it is economic, it is social. We've just spent the last 20 minutes talking about the economic distress in this country, and in the African-American community it is felt even more strongly. Here are a couple of facts to bear that out. The unemployment rate by race: among whites, 6.6 percent in December; among African-Americans it's already in double digits, 11.9 percent, up three points. And there is this sobering assessment from the Economic Policy Institute from back in September: "The overall social well-being of African-American communities depends upon strong job growth. The historical evidence shows clearly that strong job and wage growth are the keys to reducing black poverty. Without reductions in child poverty, we can expect continued lower educational achievement, higher rates of teen pregnancy, and a higher than average rate of crime in black communities." These are discouraging facts. Bill Cosby, let's start with you.

DR. ALVIN POUSSAINT: Well, I think all the things that you mention are severely, like, aggravate all the things are happening--bad things happening in black community: the unemployment rate, the poverty rate. We know that the poverty and the unemployment distresses families. At the same time that you have this high unemployment rate you also have, with the downturn in the economy, a cutback in all kinds of services, particularly that poor people need, that children need. The schools get cut back, so the, the schools are also having a more difficult time in educating young people. So the crisis is very, very serious and may get worse, because the poverty rate certainly will go up because of the economic downturn. And it's likely that even more young people will not find any kind of, kind of work. I mean, the high school dropout rate in a lot of urban areas is, like, 50 percent among--particularly among African-American youth in the major cities.

MR. GREGORY: Uh-huh.

DR. POUSSAINT: And when they drop out of high school they've very likely--got a six out of 10 chance of ending up at some point in, in prison. So all of the things we talk about in the book--the high incarceration rate, the high high school dropout rate, the violence in the black community--what are people going to do if they don't have any money?

MR. GREGORY: Mm-hmm.

DR. POUSSAINT: Is that going to increase crime? Very, very, very, very likely.

MR. COSBY: But I also--I'm sorry.

DR. POUSSAINT: Go ahead.

MR. COSBY: I, I think we need to do some work with numbers. For instance, if in a city the--to educate a kid in public school it would cost $8,000 per child, let's use that figure; to incarcerate, keep that person, is 41,000.

MR. GREGORY: Mm-hmm.

MR. COSBY: All right. So if, if we know that the lack of education leads to a person's chances of committing crimes because they are not skilled at anything in particular, perhaps even illiterate or functionally illiterate, then why not try to educate all of our children, try to educate all of our children? So eight from 41,000 leaves you 33,000 left. I think we need to do the math on that and put more children in a position who are not doing well...

MR. COSBY: ...to help them do well, because these children are not--you--some of them may be different, they learn differently. So instead of just moving little Alvin along, let's educate Alvin to move along so he can catch up with Bill.

MR. GREGORY: Congresswoman Waters, enter President-elect Barack Obama. How does the nation's first African-American president take on these problems?

REP. MAXINE WATERS (D-CA): Well, let me just say that despite the economic crisis that we're in, President Barack Obama is talking about the biggest stimulus package that's ever been discussed in the history of this nation. And we're in a situation where, yes, people are hurting. You just told us what the unemployment numbers are. But you know, a rising tide lifts all boats, and so what you're going to have is an infusion of dollars in the community creating jobs. That's for everybody. You're going to have jobs that are in the construction industry, because we're talking about now infrastructure repair in ways that we have not talked about it before, the roads and the bridges, and these jobs are for the skilled and the unskilled. So I'm hopeful, very, very hopeful that many of these unemployed youth that are probably at about 28 percent unemployed will get jobs, and some of us are working very hard to target some of those jobs to the worst areas of our country.

MR. GREGORY: And Mayor Fenty...

MAYOR ADRIAN FENTY: Yes.

MR. GREGORY: ...I mean, if there is going to be a bigger social safety net, you're going to need it here in the District.

MAYOR FENTY: That's right. Yeah. And, and I think President-elect Obama is hitting the stimulus out of the park. I think he's doing exactly what's needed in the immediate term, and it's going to take us forward for a couple of years. But I point people also towards what I think will also be a signature issue for the Obama administration, and that's education.

MR. GREGORY: Mm-hmm.

MAYOR FENTY: His choice of Arne Duncan as secretary of education is a choice out of Chicago, out of the box, someone who is going to challenge status quo, traditional ways of doing things. And I think all these things--jobs, the crime, housing--are driven by this unbelievable statistic of how poorly African-Americans and Latinos are educated in the inner city and in rural parts of the country.

MR. GREGORY: Bill Cosby, I want to come back to you. I want to pull back for just a second. Will you tell me what it was like for you to go in and vote for Barack Obama?

MR. COSBY: Well, I took my father's picture, I took my mother's picture and I took my brother James, he died when he was seven, I was eight. And I took the three of them into the voting booth in Shelburne Falls, Massachusetts, and I pulled the curtain and I took their pictures out and I said, "And now we're going to vote." And I--we only, I only voted once. But--and I did that and their pictures were out, and then I put them back into my pocket and I opened the curtain. And it, and it was wonderful.

MR. GREGORY: And here you are on--have been on this journey in the course of your life and career, now you're on this journey to get people as angry as you are, as you've said in, in a speech. What do you expect of this new president, who happens to be our first black president?

MR. COSBY: Change, challenge for all of us. I believe he's asking us to be honest. I, I, I believe he's, he's asking us to be honest. I believe he's asking us to look around and see in all honesty what we can do and what makes sense as opposed to what will go into our pockets or make us feel good or who we can punish according to our religion. I think it's time for all of us to, to do things in terms of community, to stop worrying about what other people think of us and, and just go right on in and begin to talk to our youngsters about correct choices, to not be afraid to, to challenge them and be honest with them and, and, and to not be afraid to just stand and, and work with him and think that we're working with him to make change and choices and challenge.

MR. GREGORY: One of the things that really strikes me about this book, "Come On, People," is that as a parent with three young kids, I think it just has a transcendent message.

MR. COSBY: Yes.

MR. GREGORY: Which is that parenting matters.

MR. COSBY: Yes.

MR. GREGORY: That you got to be involved in your kids' lives, you got to let, let them know that, that you love them.

MR. COSBY: That's true.

MR. GREGORY: The, the president-elect back in June, on Father's Day, spoke about some of these issues in a pretty blunt way. Let's listen.

PRES.-ELECT OBAMA: If we're honest with ourselves, we'll admit that too many fathers are also missing. Too many fathers are MIA. Too many fathers are AWOL, missing from too many lives and too many homes. They've abandoned their responsibilities, they're acting like boys instead of men, and the foundations of our family have suffered because of it. You and I know this is true everywhere, but nowhere is it more true than in the African-American community. We know that more than half of all black children live in single-parent houses. Half. A number that's doubled since we were children.

(End videotape)

MR. GREGORY: The president-elect, his father wasn't around. He left when he was two years old. Raised by his mother and his grandparents in Hawaii. The idea of the president-elect as a role model, you write about that in the book, and this is what you say: "For many black males, chances for success seem slim in many fields because they lack role models. ... These kids see all the bad role models you can imagine--drug dealers, pimps, you name it. But positive role models do exist. We're talking about ordinary black men doing an honest day's work as cab drivers, counselors, bus drivers, doctors, lawyers, and businessmen." And now we add this, president of the United States, as we take a look at, at the first family.

DR. POUSSAINT: Yeah. Well, I--yeah, I think what he's saying is, is very important, and I think parenting is very, very important and that needs to be emphasized. And the fact that the president is talking about that, I think we need to talk about it much more so that, you know, it's not just single parents or two-family homes, it's whether you're a good parent or not...

MR. GREGORY: Right.

DR. POUSSAINT: ...is very, very key. And so everyone needs to be educated in that way. I would like to see, like, a national conference call, you know, on parenting...

MAYOR FENTY: No, you're right. No, you're right.

DR. POUSSAINT: ...you know, and get everybody on that same kind of wavelength to make a difference for their children. Because particularly now, it's going to take time for the stimulus to kick in. Families are going to be under stress.

MAYOR FENTY: Mm-hmm.

DR. POUSSAINT: And when families are under stress, children are under stress right now, and depressed and anxious. And there's going to be increased homelessness, at least...

MR. GREGORY: ...and you go out there and you see young people--the fact that we have a black president, that means something.

REP. WATERS: Well, of course it means something. He's absolutely a role model. I was watching the young boys from the Ron Clark school who have a--they were in a choir, and they have created a song about Obama. And I was watching their faces. And certainly if there's one thing you can say about this historic election, it is that he has created hope. He has, you know, let young people know and young black boys know that you can, you can indeed succeed.

Let me tell you about this parenting issue. I have--or we just had a Black Caucus retreat, and parenting emerged as the number one concern in that retreat. Now, as a public policymaker and a legislator, I think about ways by which we can be helpful in bringing about the kind of public policy that will assist families. And so parenting is one thing that I'm going to spend a lot of time on, because I think that we should dedicate personnel in our public schools to work with parents and to get parents involved. The PTA does not do that. But the teachers cannot do that, the teachers cannot be concerned about what is going on in the classroom and follow the kids home. But if we have a component in the school that's dealing with going to the home, finding out what is happening with this child, what are the circumstances under which they are living, and be able to direct resources toward that family and give families support, I think we can use parenting as a way to begin to deal with these very serious problems where children drop out and children are already considered failures before they reach high school.

MR. GREGORY: But, Mayor Fenty, how much of an experience do we have in cities across the country, but I'll talk about Washington, D.C....

MAYOR FENTY: Yeah.

MR. GREGORY: ...where young kids are even paying attention to what's going on with Obama, but they may look at him and say, "No, no, that's not me. That's not my life. That's not my path."

MAYOR FENTY: I see--I don't think that that's the case. I really think that Obama connects with this generation of Americans in a way that few presidents ever have. These shots of him, you know, preparing his young daughters to go off to school, I mean, these are just going to resonate through the psyche of, I think, people in Washington, D.C., and other cities. And you know, someone said to me in a, in an Obama fundraiser one time, he was a white gentleman in, in his 50s, he said to the crowd, "You know, to all of us he'll be the first black president. But to our kids and the younger generation, he's just the president."

MR. GREGORY: Mm-hmm.

MAYOR FENTY: That cap of the African-American never being a president will never exist for them. And I think that will have more of an impact on being a role model or anything else than anything we've ever seen in our community.

MR. GREGORY: It's interesting, Bill Cosby, to tie a couple of these things together. There's actually been some research done by the so-called "Huxtable effect"; referring, of course, to your program "The Cosby Show," which we all watched in, in the '80s. There was something you said about this that, that comes together, which is what this family demonstrated is that they were in control of their kids, they weren't losing to their kids, which is something I said to my wife last night. I said--or actually, I said to my six-year-old. I said, "No, son, I'm the boss here."

MR. COSBY: That's exactly right.

MR. GREGORY: How important was that show, do you think, in paving the way for Obama's success?

MR. COSBY: I, I, I don't know. I--look, that show's always--it was 25 years ago, so certainly it should have hit somebody before it hit Obama. So what, what I have to do is give credit to Michelle and to Barack and the beauty of what they've done with their children, with their lives. I still wear the, the rubber thing that says, you know, the Obama--because that was the day we were going around Detroit talking about get out and vote.

MR. COSBY: This moment is not just a black man, black man. And I'm not one of those people who professes, "Well, this is just a--this is not a black man, this is, this is about who happens to be."

MR. GREGORY: Yeah.

MR. COSBY: No, he's been. The important thing about it is what he's doing with this country, for this country. And the beauty of it is, is that his story, his story of his mother, his--Michelle's story of her father, this hits all colors, all religions...

MR. GREGORY: Mm-hmm.

MR. COSBY: ...all races. Verbum Dei, out where your community is...

REP. WATERS: Yes, mm-hmm.

MR. COSBY: ...these Jesuits, I--they have an answer, and they make their boys go out into the community and give service.

MR. GREGORY: Mm-hmm.

MR. COSBY: One of the things I've heard--and I'm sorry to take so much time. But one of the things I've heard is that when a person gives, when a person does a service, that there's something that happens to them emotionally. I've heard people in prison working with prisoners talk about prisoners breaking down and crying because they taught another prisoner, they mentored another prisoner to learn how to read. And that the, the mentoring person started to cry. You can't--as a policeman, as a policeman said to me--make a man cry by punching him in the face. They don't cry. But here this man is, and it's something emotional about us giving to each other, teaching each other. And that's what this family's talking about.

MR. GREGORY: It's interesting, though. Let's, let's be honest about it, in the course of the campaign Barack Obama went out of his way to become a politician who happened to be black, so that people wouldn't necessarily think that he had some sort of, you know, black-focused agenda. And there are limitations, perhaps, on the first African-American president. The New York Times wrote about it, Matt Bai, this summer, in which they say, in part, "Obama ... will confront ... how to be president of the United States and, by default, the most powerful voice in black American at the same time. Several black operatives and politicians [said] that an Obama presidency might actually leave black Americans less well represented in Washington rather than more so. ... The argument here is that a President Obama, closely watched for signs of parochialism or racial resentment, would have less maneuvering room to champion spending on the urban poor, say, or to challenge racial injustice." Is that a limitation?

REP. WATERS: No, absolutely not. That's one of those arguments that's developed basically by pundits who kind of look from the outside. Barack Obama is about to lead the passage of a $1 trillion stimulus package. As I said, it's never been done. He's going to have the support of Democrats and Republicans alike, and you're going to see the kind of leadership that you have not seen in the past. No, it does not take anything away from his ability to target to those who are most in need. We examine the language that Barack Obama used in our retreat, and we discovered that many of us are saying the same thing.

MR. GREGORY: Mm-hmm.

REP. WATERS: Except he found ways to say it that make people feel comfortable, that make them feel safe. He has a--has developed a style and a language and a way of presenting himself that causes people to stop and listen. I've been in presidential campaigns, I was with Jesse Jackson, and I thought to myself in the beginning of this campaign, here we go again.

MR. GREGORY: Hm.

REP. WATERS: But what Barack Obama understood was that you have to be very, very thoughtful about how you talk about issues. He talks about morality and empathy, and people buy into that.

MR. GREGORY: Mm-hmm.

REP. WATERS: And so I don't at all conclude that because he happens to be African-American, that somehow he won't be able to target our direct resources. This is not a good argument.

MR. GREGORY: Hm.

MAYOR FENTY: I, I think he's part of a new type of politician, whether it's a Cory Booker, a Deval Patrick, Martin O'Malley, Gavin Newsom...

MR. GREGORY: Or you. You're also...

MAYOR FENTY: ...whoever you want to name, who are saying, "It's not going to be either or anymore."

MAYOR FENTY: "I'm going to be either a mayor, governor or president for all the people." He stuck with that message, and the American people overwhelmingly accepted it. I think that he's going to govern like that.

MR. GREGORY: And this is what he told, this is what he told Ebony magazine just this past January here: "I don't have to choose between different [racial] groups. I want to put together a plan that is good for everybody. When we spend all of our time just focusing on things that are unique to us [as African-Americans], it becomes harder for us to build the broad coalitions to deal with the problems that we have in common with everybody."

DR. POUSSAINT: I, I agree with that. I think he has to build coalitions. He will do that. He's done that already, I, I think. That he--if, if he improves the economy with the stimulus, he's going to help everybody.

REP. WATERS: That's right.

DR. POUSSAINT: He's going to help the black community.

REP. WATERS: That's right.

DR. POUSSAINT: And from what we just watched on the monitor, he is very concerned with what's happening to particular populations within the United States.

MR. GREGORY: Hm.

MAYOR FENTY: Right.

DR. POUSSAINT: African-American, Latinos, women and so on, because he's for social justice...

MR. GREGORY: But does he have an obligation, in your mind, to speak specifically to the black community the way you speak to them in this book?

DR. POUSSAINT: I--well, that's up, that's up, up to him. I think, I think he does. I feel very comfortable about Obama as, I'd say, an African-American who's concerned about African-American problems. I think that's part of him. It's part of his life.

DR. POUSSAINT: I think we should ask what the black community can do, too...

REP. WATERS: Yes.

MR. GREGORY: Right.

DR. POUSSAINT: ...for Obama. That as he has inspired many of us, I think we also--everybody has to get behind Obama and in fact use his inspirational messages to build on, to help move us forward...

MR. GREGORY: Right. Well...

REP. WATERS: Yes.

DR. POUSSAINT: ...both politically, socially and even with being better parents.

MR. GREGORY: Bill...

REP. WATERS: Well, let me tell you, experienced legislators, particularly in the Black Caucus, who now have arrived to chairmanships and subcommittee chairmanships...

MR. GREGORY: Hm.

REP. WATERS: ...we have the legislation. We're talking about the same kinds of issues that he's talking about. We have the knowledge, we have the experience to carry forth his agenda that he describes, in terms of morality and empathy. It's all about the least of these in many cases, and fortunately we'll be able to give a lot of assistance to him. We know how to do it.

MR. GREGORY: Three to five million people? More than that? What do you think?

MAYOR FENTY: We're preparing for the largest numbers. No one knows exactly how many people will come, but the mall can hold somewhere in that range. If anybody can fill it, Barack Obama can. And we, we're working very closely with the Secret Service, everyone else to be as prepared as humanly possible.

MR. GREGORY: In Ben's Chili Bowl it says "Who eats for free at Ben's? Bill Cosby and no one else." But during the 2008 race they've changed it: "Who eats for free at Ben's? Bill Cosby and the Obama family." You're not alone.

MAYOR FENTY: David, you know, he said backstage that Obama hadn't earned it.

MR. COSBY: Not only, not only that, Mr. Loose Lips, I am saying also that the only--there are two people, Michelle and his mother-in-law. I don't mind them. But he has not earned it. Got to come a long way, Jack, before you can have...

MAYOR FENTY: See, the president's not big enough.

MR. COSBY: But, but the mayor brought him to try to boost his name and put it on the thing.

REP. WATERS: Oh!

MR. GREGORY: Yeah. Unbelievable.

MR. COSBY: And his name, he's a...

MAYOR FENTY: Cosby's upset because I had the first half-smoke at the new baseball stadium, the first Ben's Chili Bowl.

MR. COSBY: And you raised, you raised the half-smoke and said "I beat Bill Cosby." That's what you said.

MR. GREGORY: So there--what, what did you talk about yesterday? How's he feeling?

MAYOR FENTY: Oh, he, he's, he's doing great, and I asked him that question. As is his family. And he, he, he's very concerned about city issues. We talked about schools, affordable housing, voting rights here in Washington, D.C., of course. But his energy's high. And I saw him the entire campaign, and I think he's, he's excited to come into this position. Within one week of being in D.C. he's already getting out and about. That's a great sign for him and for the country.

MR. GREGORY: And, Congresswoman Waters...

REP. WATERS: Yes.

MR. GREGORY: ...Roland Burris.

REP. WATERS: Yes.

MR. GREGORY: Will he indeed be seated, and are you looking forward to having him as the next senator of Illinois?

REP. WATERS: He will be seated. It's a matter of the rule of law. He not only has a Supreme Court decision about not having to have the secretary of state's signature, but I think he'll be able to meet the requirements of going to the rules committee and getting a decision there, because the law is on his side.

MR. GREGORY: All right. And just about 45 seconds left, I want to come back to a serious point, Bill Cosby.

MR. COSBY: Go.

MR. GREGORY: What do you think you've achieved in the year and a half since you've written this book and been doing callouts around the country?

MR. COSBY: I think that Alvin and I have produced a book that says if you have a problem and it has anything to do with anything that's in this book, we have people who, who testified how they got out of the problem.

MR. GREGORY: There are solutions.

DR. POUSSAINT: Don't succumb to being a victim or have a victim mentality, have a victim mentality. It's like if Obama thought of himself as a victim...

MAYOR FENTY: Yeah.

DR. POUSSAINT: ...he would never be president of the United States.

MR. GREGORY: All right. Thank you all for being here. Thank you very much.

REP. WATERS: You're welcome.

MAYOR FENTY: Thanks for having us.

REP. WATERS: Thank you.

MR. GREGORY: We are out of time, but we'll lighten the mood and laugh a bit with Bill Cosby in our MEET THE PRESS Take Two Web extra this afternoon. You can also read excerpts on--of "Come On, People." It's all on our Web site at mtp.msnbc.com. Got it all right there. And we'll be right back.

(Announcements)

MR. GREGORY: That's all for today, the first of our leadership test for the new president series. We'll be back next week. If it's Sunday, it's MEET THE PRESS.